Number 1 on the Podium - Find me a cheaper Precious Metals play, page-1185

Interested to hear more - I agree, recovery rate shouldn't be the issue eg long experience of South African mines. Key is to work on the grind sizes for flotation.

The problem for investors, it seems, is the lack of indication on economics. How much capex is required for a starter mine? What is the opex and mining profit?

As referred by you (h/t) and pointed out by Keith Goode, Understanding & Analysing PGEs:

1. Start with high grade 100koz pa operation (ie focus on one or two starter mines)

Most PGE coys start producing at 100kozpa Pt (or Pd) and then have applied their cashflow to increase to higher amounts. Both Implats and Rusplat started at ~100 to 200kozpaPt & gradually increased to ~1.2Moz to 1.5MozpaPt treating ~12Mt to 15Mtpa. Implats now treats ~30Mtpa and Amplats (originally Rusplats) now treats ~25Mtpa from its mines.

2. Good recovery rates can be obtained from flotation
In determining the treatment rate, flotation recoveries have to be assumed followed by smelter recoveries of possibly 99% for Pt & Pd. Chalice reported expected recoveries based on preliminary testwork in November 2021 of 65% to 75% for Platinum and 75% to 85% for Palladium – both of which are relatively low compared to those expected by Zimplats in 2002 as shown in Figure 1. In my 1985 report, Implats was achieving recoveries ~87% for its Pt & Pd.

3. Byproduct should pay for Opex
While 2Es to 4Es (or even 6Es) are useful for comparing different PGE orebodies, the evaluation of the 10 minerals can be daunting. However, there is a simple solution, namely to try and get the byproduct credits to pay for all the operational costs (similar to gold/copper mines), leaving the Primary PGM (or a percentage of it) as the key perception of value (eg if all costs are paid, then 100% of Pd produced x Pd Price is pre-tax profit). ERA estimated ~$120/t Opex for CHN.

4. Modest Capex/High ROI
Stockpile the low grade and focus on the main game – the sulphide from the individual reefs / domains / lodes for the valuation. (Cost to pre-strip 500m x 500m x 25m thick possibly $40M to $50M) – as a Stage 1 pit.

Capex for Nova in 2014 FS was $450M of which $90M was to establish the underground, so $360M which included $24M on external roads, $34M for the camp, $10M for the airstrip, possibly $290M for a 1.5Mtpa plant – perhaps conceptually $400M for 3Mtpa & sell the concentrate (or next stage smelter too). At $400M or possibly $500M, not too hard to potentially generate A$1.2bn to $1.5bnpa pre-tax [for CHN].

So that's all very well and makes total sense but we need to hear this from POD now.